Publishers Balking at Apple's 30% "Pay to Play" Tax?

[Michael Knutson]

<div class='os_post_top_link'><a href='http://techcrunch.com/2011/02/15/apple-keelhauls-music-streaming-services/' target='_blank'>http://techcrunch.com/2011/02/15/ap...aming-services/</a><br /><br /></div><p><em>"Lots of hullabaloo about Apple's iOS subscription product. The basics - everyone pays 30%, you can't charge more on the iPhone for the product than you do on other platforms, and you can't link out from the app to the browser to handle subscriptions without Apple being in the middle. It's not even clear that apps will be able to just post a message telling people to create an account from their computer and then come back to their iPhone and use the app."</em></p><p><img src="http://images.thoughtsmedia.com/resizer/thumbs/size/600/at/auto/1297878041.usr17748.jpg" style="border: 1px solid #d2d2bb;" /></p><p>Interesting that the term "keelhauling" is being used here. There seems to be a significant amount of anger and resentment expressed in the press about Apple's new services. Publishers claim that they won't be able to make money paying 30% to Apple. Understandable for services that are barely breaking even. So, does this force iOS users into mass-jailbreaking and using "other" app stores? Does this drive users to Android? Personally I think (or at least hope) that Apple will eventually work with content publishers to come up with a (different) model that works.&nbsp;</p>

[Sven Johannsen]

I think the problem here is that there MUST be an in app purchase that goes through Apple and they CANNOT charge more via that option. Many users will likely use that option, and won't realize that it is costing their source 30%. This almost guarantees the providers will take a significant hit in revenue on what is arguably the most prolific third party platform. Third party being the iPad is not Amazons or B&Ns (or Sony's?) primary platform.

Maybe I'm wrong,and most folks would go to Amazon or B&N on the web to do their shopping anyway and the in-app purchases aren't that significant, but with the option they certainly would get used. Seems the only fair thing would be to allow the providers not to have an in-app purchase at all, or let them charge more to compensate for the Apple tax. Consumers could then decide whether the convenience was worth the extra fee. Without that the content producers are going to have to decide whether they can suffer the Apple tax hit, or just not have an iOS option, and suffer that hit.